Ownership Interests

Question 1

Present Possessory Estates

Answer 1

Fee Simple Absolute

• infinite duration
• presumed absent express contrary intent

Defeasible Fees

• Fee Simple Determinable (and Possibility of Reverter): durational language “for so long as,” “while,” “during,” “until”; automatically reverts to grantor
• Fee Simple Subject to a Condition Subsequent (and Right of Entry): “upon condition that,” “provided that,” “but if,” and “if it happens that”; right of entry must be expressly reserved, and grantor must take some action to exercise it
• Fee Simple Subject to an Executory Interest: either determinable or subject to condition subsequent causes interest to pass to TP instead of G

Fee Tail: inheritability is limited to lineal heirs; today mostly results in fee simple

Life Estate

• For life of grantee
• Pur autra vie (i.e., when life T conveys his life estate to another)

Question 2

Life Tenant: Rights and Duties

Answer 2

Life T can only maintain the estate, continuing the normal use of the land in its present condition (depletion of natural resources can continue under Open Mine Doctrine)

Life T must: (1) preserve land and structures in reasonable state of repair; (2) pay interest on mortgages (not principal); (3) pay ordinary taxes on the land; (4) pay special assessments for public improvements of short duration

Future interest holder can sue to enjoin waste

Affirmative (Voluntary) Waste: any affirmative act beyond maintenance that causes harm to the premises

Permissive Waste: T has failed to maintain the estate; involves inaction (fails to do things listed above)

Ameliorative Waste: benefits the property economically; actionable at CL but now life T may alter or even demolish existing buildings if (1) market value of future interests is not dominated; and either (i) the remaindermen do not object, or (ii) a substantial and permanent change in the neighborhood conditions has deprived property of reasonable productivity/usefulness

Question 3

Remainders

Answer 3

A future interest in a TP that MUST be expressly created that can become possessory on the natural expiration of the preceding estate (CANNOT divest prior estate)

Indefeasibly Vested Remainder: created in an existing and ascertained person, and not subject to a condition precedent

Vested Remainder Subject to Open: vested remainder in class of persons (“children”) that is certain to become possessory but is subject to diminution

Vested Remainder Subject to Total Divestment: vested remainder that is subject to a condition subsequent

Contingent Remainders:

(1) Subject to a Condition Precedent (perhaps alternative contingent remainders)
(2) Unborn or Un-ascertained Persons

• Most states have abolished the Destructibility of Contingent Remainder rule
• Rule in Shelley’s Case: rule against remainders in grantee’s heirs is abolished in most states
• Doctrine of Worthier Title: rule against remainders in grantor’s heirs is treated as rule of construction, applies only to inter vivos transfers and must say “heirs”

Question 4

Executory Interests

Answer 4

Future interests in TPs that either divest a transferee’s preceding freehold estate (“shifting interests”), or follow a gap in possession or cut short a grantor’s estate (“springing interests”)

Question 5

Rule Against Restraints on Alienation

Answer 5

3 types of restraints:

(1) disabling restraints: attempted transfers are ineffective = VOID on ANY legal interest
(2) forfeiture restraints: attempted transfer forfeits the interest
(3) promissory restraints: attempted transfer breaches a covenant

All absolute restraints on FS estates are void

Restraints on vested future interests are generally valid to the extent that restraints on present interests of the same type are valid

Valid restraints:

(1) reasonable restrictions in commercial transactions
(2) reasonable options and rights of first refusal
(3) restrictions on assignment and sublease of leaseholds (requiring L’s consent)

Question 6

Concurrent Estates: Joint Tenancy

Answer 6

• Each T has an undivided interest in the whole estate, and the surviving co-T has a right to the whole estate (right of survivorship)
• Creation: Without express survivorship language, may be construed as TIC; four unities = JTs must take (1) identical interests (2) from the same instrument (3) at the same time (4) with an equal right to possess
• Termination: voluntary or involuntary partition; OR severance (estate converts to TIC) by (1) conveyance by one JT; (2) agreement of JTs; (3) murder of 1 co-T by another; (4) simultaneous deaths of co-Ts; (5) mortgage in a title theory state (NOT TX, a lien theory state); (6) a K of sale (because of equitable conversion); (7) a creditor’s sale of the interest in the JT (no severance until sale actually occurs)

TX RULES:

• CL joint tenancy DOES NOT EXIST
• Right of survivorship can be created by agreement b/t the parties

Question 7

Concurrent Estates: Tenancy by the Entirety

Answer 7

• H and W each has an undivided interest in the whole estate and right of survivorship
• Some states presume this in any joint conveyance to H and W where 4 unities
• Termination: can be severed by death, divorce, mutual agreement, or execution by a joint creditor; CANNOT be terminated by involuntary partition
• NOT recognized in TX

Question 8

Concurrent Estates: Tenancy In Common

Answer 8

• Each T has a distinct, proportionate, undivided interest in the property; there is NO right of survivorship
• Only unity required is possession
• Termination: by partition
• Rights and Duties: each rights to possession; right to retain profits from her own use, but must hare net rents from TPs and net profits gained from exploitations of land (e.g. mining); entitled to contribution for necessary repairs upon notice; contribution can be demanded for taxes or mortgage payments paid on entire property